Local govt reforms shelved after pressure from mayors

Local Government Minister Sam Lotu-Iiga has put off controversial reforms to councils after mayors described them as anti-democratic. Picture: Mark Mitchell

Contentious reforms to local government have been shelved until next year after the Government caved to pressure from a group of mayors who said the changes were anti-democratic.

Local Government Minister Sam Lotu-Iiga confirmed today that he had delayed a deadline for a select committee to report back on the reforms. Instead of producing a report in October, the committee had been given a new deadline of March 31.

"This will enable more rigorous analysis of submissions and more constructive dialogue with the local government sector," Mr Lotu-Iiga said.

"There were nearly 200 submissions on the Bill. Many contain details which need to be worked through with officials to ensure they will work."

The law changes would have given the Local Government Commission power to override councils and force them to integrate to a Super City-like structure.

The Government had wanted councils to combine resources in order to cover the costs of core infrastructure projects such as water, sewerage and roading. Some small councils have run into trouble in recent years while developing major infrastructure schemes such as wastewater, which has led to rates blow-outs and central Government intervention.

But the Government's proposed changes stirred strong opposition from some mayors, a group of whom took the rare step of making a joint submission in opposition to the bill.

Local Government President Lawrence Yule told a select committee earlier this month that there was deep concerns about giving power to the commission to establish Council Controlled Organisations (CCOs) without the agreement of the affected local councils.

These concerns prompted United Future leader Peter Dunne to pull his support for the bill, meaning it would not have had the numbers to pass into law.

Lotu-Iiga said today that it was "imperative" that steps were still put in place to ensure that big infrastructure projects were well-managed.

But he acknowledged the concerns raised by councils, and conceded that solutions needed to be found that "promote local democracy".

"I look forward to further discussions with the local government sector to explore options and solutions for the issues that have been raised," he said.

Labour's local government spokesman Meka Whaitiri said the minister should have gone further and dumped the "doomed" bill altogether.

"This is an absolute admission by the Minister that this almost universally panned bill is fundamentally flawed and needs a massive overhaul.

"Local Government New Zealand and nearly every mayor and council in the country is opposed to this Bill, because of its provisions which undermine local democracy and decision-making."

Prime Minister John Key hinted last month that the reforms could be delayed or dropped, saying that he would not "die in a ditch" over the changes.